The Art of Reserving General Insurance Markets

There’s become a common trend unique to the insurance industry which is limiting, and in some cases, completely preventing competition. When you make an agreement with an incumbent broker or agent, most insurance buyers fail to realize they are allowing that party to reserve exclusively all the incumbent insurers on your current insurance program.

Think about it for a moment. If you advise your agent of your intent to go to bid or complete a Request for Proposal (RFP) process, an incumbent broker/agent has the power to “reserve” any other insurance companies which they feel may provide competitive terms. The end goal of this practice of blocking markets is to simply eliminate competition for your business.

What It Means for Businesses

Other brokers or agents participating in an RFP will be denied access to a quote for your account from any insurers who may have provided a quote to your incumbent broker/agent.

When the incumbent broker/agent blocks those insurers it effectively eliminates any competition. As a result, it’s impossible for you to know whether or not another potential broker has better negotiating skills, or the ability to leverage their premium volume with interested insurance companies. In short it’s bad for business.

Explore All Your Options

Finding a third-party expert can assist in obtaining market rates and coverage improvements with insurance companies offering rates the same or better than your current insurance company.

Expense Reduction Analysts (ERA) utilizes a unique Conceptual RFP process which allows for many brokers to demonstrate their results including pricing, coverage improvements and services. Brokers are asked to outline their credentials including industry specialization, consulting expertise, insurance company relationships, and specific services. 

As an independent third party, ERA also demands full disclosure of a broker’s compensation so clients know exactly how funds are allocated and what compensations are being provided to the broker. This process advocates for transparency, which is beneficial for all parties involved, especially the employer seeking a reasonable insurance cost. 

Plan Out Your Investments Wisely

ERA recognizes that clients benefit from a long-term relationship with their insurance broker.  With that in mind, it’s never a bad idea to compare a broker’s service offerings with the ability of an unbiased third-party expert to manage competitive bids. Understand all the ins and outs of any agreements with incumbent brokers and agents to be sure you’re never left in the dark.

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